About this Author

College chemistry, 1983

The 2002 Model

After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases.
To contact Derek email him directly: derekb.lowe@gmail.com
Twitter: Dereklowe

February 6, 2013

Trouble Hiring Whom, Exactly?

Posted by Derek

Here's a report on employment in the biopharma industry that will cause some pretty strong emotions in those of us who (still) work there. PriceWaterhouseCoopers (PwC), in their annual CEO survey finds (here's the good news) that:

Nearly three-quarters (72 percent) of executives said their organizations are looking to increase R&D capacity over the next 12 months, and six in 10 intend to increase investments over the next three years to create a more skilled workforce.

So far, so good. But would you like to know what the executives said was one of the biggest problem in doing all this? Honestly, you'll never guess:

The knowledge-intensive pharmaceutical industry had the highest reported difficulty in hiring top talent of the 19 industries featured in PwC's 2012 Global CEO Survey. CEOs identified talent gaps as one of the biggest threats to future growth prospects.

Research conducted by HRI, including a survey of human resource and R&D executives at U.S. biopharmaceutical companies found (that) fifty-one percent of industry executives report that hiring has become increasingly difficult and only 28 percent feel very confident they will have access to top talent.

Well, now. One's first impulse is to refer, with deep feeling, to bovine waste products, but one mustn't jump to conclusions about whether the industry might just possibly have heaved too many people over the side over the last ten years or so. As Pharmalotpoints out, the people that are allegedly being sought are not always the ones that have already been ditched:

Of course, the workplace is not stagnant and the demand for certain skills is always evolving. Seen this way, the data suggest that pharma execs may want the sort of talent that is not on the sidelines or simply clamoring for a different opportunity. For instance, 34 percent say that developing and managing outside partnerships is the most important skill being sought among scientists. . .

Now, that one I can believe. An uncharitable summary of many of those outside partnership managerial positions would be "Keep track of what all the cheap overseas contract workers are doing". And there is indeed a demand for that relatively thankless task. Another task that appears to be strongly in demand is for scientists who can deal with regulatory affairs. Fine. But what about actual research, not actually in China or beyond? There are possibilities, but things still don't look so good if you're a chemist. Pharmalot again:

As for job growth among scientists, not surprisingly there is only a 4 percent increase forecast for chemists, who were thrown overboard in large masses in recent years, and 13 percent for microbiologists. Conversely, a 62 percent boost is predicted for biomedical engineers and 36 percent for medical scientists. Biochemists and biophysicists trail at 31 percent.

PwC seems to be taking a broad view of biopharma if "biomedical engineers" are the top category. That's a flexible-sounding category, but I'd guess medical devices, at the very least. "Medical scientists" is also the label on a rather large bin, and this gives only a fuzzy picture of where the hiring will supposedly be taking place.

Looking through the PwC material, you can tell that it's addressed largely to HR folks, trying to gear them up for all this talent-searching and position-filling. It spends, for example, some time sharing sympathy for the HR departments who don't, somehow, feel as if they're key parts of the organization on the front lines of discovery. (Which they aren't, usually, but that's another story). But there's some useful advice for them in there, too - see what you make of this:

Scientists want career paths that recognize and reward their passion and commitment to research, not just additional responsibilities. Too often, scientists are pushed out of what they do best – research -- and saddled with management chores that distract them.

Finally, senior executives must act as a powerful motivating force for their people. Companies with decades-long legacies have lost their edge due to repeated layoffs, wearing down the morale of scientific staff.

Ain't that the truth. But how many senior executives are in a position to act as a "powerful motivating force"? Well, OK, some of them have been, but with a negative sign in front, which isn't the idea. In many organizations, the sorts of behavior that the scientists would find motivating on the part of a top-level manager are often not the sorts of behavior that lead people into top managerial positions. So you get people who are, at the very least, rusty on those skills (if they ever had them in the first place). And that leads to things like (in my own experience, some years ago) hearing a high-level guy exhort various research teams while mispronouncing the names of some of their projects. Which neither bred confidence, nor raised morale.

Overall, I find this PwC report irritating, perhaps because of its HR-centric worldview. And the message of "Shortage of top talent!" is rather hard to take, no matter how you spin it. It also brings thoughts of the perennial "America's critical lack of scientists" headlines, which have only slightly abated. I'm waiting for someone to tie those two together into one annoying headline. . .

Note: I'll get back to that out-of-the-science-and-into-the-management topic again; it's come up here before, but it's an important one.

Same thing that's been happening in the software industry for the past twenty-plus years. The inability to find "top talent" simply means that you can't hire who you want for what you want to pay. If the companies dealt with this by playing honestly and paying what the market will bear vis a vis the local market, you'd see wages in the segment go up as unemployment goes down. Instead, this is used as an argument to promote outsourcing and use of H1-B and L-1 workers.

And where do you think those who need to manage these overseas workers will come from? If you no longer hire entry-level scientists to work (read train) here, in a couple decades you won't even have people here who know enough to manage your overseas workforce. Oh well, I guess we can have our H1-B's and L-1's report to management.

But the real issue is lack of STEM education and training here in the US, right? Riiiight...

The business people live in a world where they are the ones planting the seeds of innovation by organizing research teams, and that their tending of the groves through strategic project meetings and progress reports is what somehow makes the trees bear ripe and juicy new product fruit. In reality the only thing that grows on these trees is the aforementioned bovine waste product.
Then when things go badly they give the scientists a set of pruning shears to make it better when what they really need is a chainsaw. At this point the lamenting begins about the lack of good scientists and the researchers end up taking the fall for not being innovative enough.

I think the PwC report is trying to focus on the changing dynamics of pharma R&D (for better or worse) and the associated talent requirements for managing the new "externalized R&D" approach. The key quotes from the report regarding this:

"Developing and managing outside partnerships and regulatory science are the two most sought-after skills today"

"So companies are changing how they conduct R&D, not only reconfiguring existing operations, such as an increasing focus on biologics, but also looking outside for promising new alliances that will help boost capabilities and replenish the pipeline more rapidly. Partnerships with academic medical centers (AMCs) and third parties, such as contract research organizations (CROs), are the two most common, aside from government contracts.

In the new pressure-cooker environment, traditional competitors are teaming up to tackle shared R&D challenges. Consortiums, alliances with foundations, and even crowdsourcing are among the new approaches. Done well, these relationships complement in-house R&D and allow companies to share both risk and reward with external partners."

When I started in this business in the late 80's Pharma execs often appeared in a near panic regarding the crisis in finding qualified scientists - apparently meaning that the many of thousands of recent graduates (MS and/or PhD) whose adviser was not one of the top few academic superstars at the time - think Corey, Danishefsky, Trost, Evans, etc. - were basically poorly qualified and likely could not be brought up to speed... The current crisis seems to be somewhat more irritating though - given the legions of laid off scientists in the industry today. Posted position descriptions are getting more ridiculously detailed and specific than ever; and the most important criterion for candidacy seems to be the invisible check box - "must already be employed".

The overseas thing is yet another matter - would be interesting to see some real data on what shipping science overseas really costs (including all related expenses, not just FTE rates) and what sorts of actual productivity gains have been achieved over time.

"only 28 percent feel very confident they will have access to top talent."

They need to talk to a mathematician. Even at the most optimistic perfect distribution, the 28th percentile company is going to be stuck with the 28th percentile talent and not any better. At 28 percent you can't even argue top quintile or quartile of companies/talent, you have to be using "top" as in "top third". It shows the staggering level of unemployment in the field that a middling company believes they stand any chance at all of hiring a proven rock star.

10. David Formerly Known as a Chemist on February 6, 2013 10:29 AM writes...

I believe the fact this report is exposing is the unwillingness of companies to invest in developing people. There are specific skill sets such as regulatory affairs, alliance management, etc that are not learned in a classroom environment but are acquired on the job. Companies are looking for these skills but only want to hire people that already have experience in these areas, ignoring the simple fact that a very smart person (i.e. layed-off scientist) could easily be trained in these skills. But companies aren't open to these investments, they want to hire someone that will "hit the ground running". I agree there's probably a talent shortage, but industry needs to take it upon themselves to grow their own talent. The current approach is lazy and shortsighted. Imagine the loyalty you would foster by hiring smart people and training them in new skills, then treating them like valued employees! But alas, this is a management philosophy that's gone the way of phrenology and powdered wigs.

@Roger Frechette "and the most important criterion for candidacy seems to be the invisible check box - "must already be employed"."

I have found this at my company as well. We are desperate for PhD level scientists to build out an entire group, but management has been way too picky to hire anyone yet (for almost a year now!). I've mentioned to HR to not count out someone who's been laid off, as I've been there before and have known excellent chemists in that category. That has apparently fallen on deaf ears. We only get candidates currently employed, who are known to us through networking. It's frustrating because I know there are so many people out there available, qualified, etc., yet our labs remain empty.

If they can even recognize "smart" - see the 1999 article by Dunning-Kruger entitled "Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments" (google it, fulltext is available online)

You are correct about the "shortsightedness" - it is another manifestation of mismanagement.

Actually, the mismanagement has occurred at both ends of the "talent pipeline."

The wrong people get laid off; similarly, the wrong people are retained. And the right people are not hired.

The HR people I knew could not have hired an Albert Einstein. I had to always work around them to get decent candidates; they largely served as a sieve against good incoming CV's!

There are some really good comments so far and particularly agree with #2 FA and others about translation of MGMT speak means really seeking cheap labor (to do highly skilled work). Also concur with #10 DFKAC regarding lack of development.

My current position can be pretty much be described as "Developing and managing outside partnerships and regulatory science" however I do not feel secure in the current environment as would be considered "over-qualified" due to years it has taken me to acquire skill set (nor really wish to return to a (disfunctional) Big Pharma). If there is not good R&D at the foundation then there is nothing really to out-source, partner or move to a regulated stage. Pharma has become so mission fragmented with a loss of focus and although the science can not be done in a vacuum to discover and develop a drug at least has to be a core part of the business. There seems to be fewer and fewer places that people can be trained adequately to really understand and attempt to learn how to manage the complex process involved as most only see the surface and not in-depth experience resulting in false confidence and ability to be effective.

The R&D players can not be absolved of responsibility for the current state of Industry however the lack of leadership and willingness to take the longer view by MGMT (I believe largely misguided MBA syndrome) has done the most damage. And when it comes to motivation MGMT and HR does need to recognize typically R&D has different motivation paradigm from other parts of Pharma to reward appropriately.

Well I, for one, hope this is true. I have certainly spent the last decade trying to convince people NOT to go to graduate school, at least as a career move. And certainly the job market in both industry and academia has shown this to be good advice. Get an MD or an MBA but steer clear of the PhD, kid!

This has always been my assumption. It seems so obvious and transparently dishonest that I'm shocked to see a continual stream of news articles repeating the lie, both with respect to pharma/biotech and also IT. It's deeply unsettling to me, because I strongly believe that a) scientists in other countries should have just as much of a right to compete for these jobs as Americans (or Europeans), and b) there is probably no avoiding lower salaries in the long term, given the intense competition from developing markets. But it makes my blood boil when American CEOs - who of course will be the last to see their salaries reduced or their jobs outsourced - use their bully pulpit to push policies which have no other purpose than screwing American workers.

The idea that there aren't enough qualified applicants is absurd; I know many excellent folks looking for a position.

I graduated from a top five school just over three years ago, was fortunate to be one of a just a few of my very talented and enthusiastic classmates to find a position in industry that year. The position was at a medium-sized biotech. I have since been laid off due after negative trial data and it seems that that's it: University, graduate school, industry for three years and now I'm out of luck. I've been looking for a new position for over six months.

@5 and @11, I completely agree with your sentiments. I have seen companies post for the same position for many months at a time; I believe it would be very straightforward to find qualified people in this market. I had always heard it's easier to get a job when you already have one, but I never imagined the stigma that is associated with having been laid off.

There is no apparent future in chemistry for me...I guess it's because I'm not qualified.

Good comments so far. I think there's another underlying issue at work here as well, and it's mentioned in the report - HR. I don't think "talent gap" is due to the talent not being out there (I completely reject that notion). Instead, I think HR has been reduced to complete incompetence due to the fact that the new electronic systems eliminate resumes of candidates that are actually qualified simply because they don't have the right keywords on their application. I have a friend in HR in another field and he hates the electronic systems that screen candidates. Hiring managers say the same thing. So my advice is that if you've ever sent a compound out to NovaScreen or off for PK, I'd make sure that you state somewhere that you've "managed outside partnerships".

@21: I wouldn't say it was incompetence on the part of HR due to the electronic systems. I'd just says it's incompetence. There is a saying: You can't spell horrible without "HR". My first job, they lost my written offer and never sent it out. Thankfully I had been in constant communication with the hiring scientist. For my second job when I showed up to fill out that first day paperwork, the didn't have one of the necessary IRS forms. They told me they were sorry they didn't have it and that I could go download it myself. Love that big corporate HR.

Top 10 program graduate in 2010. No industry position offers. Two year post-doc at top 5 program. No industry position offers. Three patents, five publications and three invited lectures to national meetings and I believe I have officially run my last synthetic reaction as I begin transitioning to a non-bench position.

I am a huge believer in personal responsibility, so I will never point the finger at anyone other than myself for where I am, but I (we...all of us) did it the right way and this should not be the result of our efforts.

It is true that there is a serious talent deficit in this industry, and nowhere is it worse than in the executive suite. Consider this: what used to be one of the greatest industry on earth is now struggling with scandals, declining sales, and a dreadful image. Anyone remember the August 2011 Fortune article that chronicled the removal of Jeff Kindler? Were the behaviors of some of Pfizer's senior leaders at that time those of talented leaders? Anyone ever listened to David Brennan's explanations about how he was going to fix AstraZeneca? Can anyone read without shaking his head how CEOs who keep delivering failures will magically start delivering new drugs like clockwork?

With some exceptions, the quality of leadership in big pharma has been problematic. That's why we have a crisis. I would however take exception to PwC's characterization. There is no shortage of talent to replace under-performing CEOs. But to avail themselves of that talent, companies need to change their leadership archetypes. Look at who is in the top jobs: conventional thinkers unlikely to rock the boat; process leaders who "fit in"; agreeable bosses with hardly a new idea. Where are the disruptive thinkers, the iconoclasts, the mad scientists, the brilliant visionaries? In their drive to turn their companies into finely-tuned machines that deliver on-demand, chief executives have snuffed imagination and creativity out of their companies. Who would want more of this kind of leadership? If PwC is correct, its message is actually good news. We need to stop promoting the leaders now in favor with HR groups, retire many of those who are already there, and replace them with folks who can manage innovation. And they are a different bunch.

"We never try to forget medicine is for the people. It is not for the profits. The profits follow, and if we remembered that, they have never failed to appear. The better we have remembered it, the larger they have been."

Unfortunately my generation of pharma leaders has trashed the most admired industry of my childhood.

My Grandfather's generation of truly great pharma leaders passed the torch to a bunch of money grubbing baby boomer posers of which I am very much embarrassed to be a member.

from the 2008 version (http://www.pwc.fr/assets/files/pdf/2008/01/pwc_ceo_survey_pharma.pdf)

"The sector’s CEOs were clearly
confident in their ability to meet the
challenges of their business with 94%
agreeing with the statement that ‘my
leadership has the capability to lead
significant change".

Bernard, you are spot on. Of course there are many exceptions, but the ironic reality is that the people who are bemoaning the "talent shortage" are incapable of consistently identifying these disruptive innovators. Or worse, they systematically weed them out in the name improving improving team dynamics or to protect their fiefdom.

There are plenty of blames to go around for the our state of affairs in medchem. Can't blame the MBA and HR for a choosing the wrong target or narrowing in on a bad lead compound. For yrs, I came across out right scientific fraud to "shut up or else". In all cases, managed by PhDs that led to resources wasted. What I find most troubling is when scientist annihilate other scientist's career instead of following their discipline. What a waste of their education.

The scariest thread I see in the PWC page (oh sorry trendy 'pwc'), is this idea that 'top talent' might be equivalent to something called 'Star Scientists'. I guess the bad CEOs who Bernard Munoz refers to would like to believe there is such a simple solution to obtaining 'breakthrough drug discoveries':

"Star scientists: professionals that lead breakthrough drug discoveries ./. can’t thrive on their own. // Effective supporting players act as sounding boards, run lab experiments and improve on the original concept. They tend to change jobs less frequently than the stars (every 16 years versus 6.5 years), retaining more institutional knowledge."

Read: 'star scientists' move on after 6 years, which is manifestly too short a time to demonstrate any reproducible success in drug discovery. Effective supporting players actually get drugs approved.

In the 90s my employer's 'pharmaceutical research' used the nice profits from the easy days to fund 'Star Scientists' doing disruptive/iconoclastic/brilliant/visionary/innovative/publishable research, complete with pwc's recommended "freedom to craft their own teams and publish as they see fit". What fabulous drugs came out of that? None that paid the bills when patents ran out. The 'star scientists' had already moved on, and 'Effective supporting players' experienced painful layoffs.

In the oughties, my employer has among the best return on research spend in the industry. Precisely by, avoiding this cult of 'Star'dom, and instead having competent scientists ensure that the pipeline passes their smell tests. That means no longer allowing a 'Star Scientist' to start programs on a whim and no evidence. Not allowing a 'Star Scientist' to support a program ad infinitum just because their protege is running it. Not allowing a 'Star Scientist' to monopolize shared resources like tox testing, NMR, Screening. Not allowing a 'Star Scientist' to push dross out of Discovery to fail on Tox or Clinical turf...

To be fairer, pwc are perhaps envisaging a 'Star scientist' as someone who can overcome the HUGE organizational deficiencies of Pfizer, GSK etc:
"It's more than just technical prowess, they act as boundary spanners, linking seemingly disparate fields and tapping new sources of information. Boundary spanners are skilled at gathering external knowledge across silos and organizational barriers, partly because of their clout and influence."

And you might need that if you have an unmanageably huge organization, if you set departments to compete against each other for resources, if you merge and layoff so often that you have no effective information capture and transfer systems. Shame it would come down to relying on a loud voice who is going to leave in 6 years.

Totally agree with #2. The scenario I see: The management can't find the talent for what they are willing to pay. The HR departments report back to management that they can't hire scientists within budget. Outsourcing ensues. HR also files paperwork with government (and execs lean on politicians and media) for more visas, due to a proclaimed lack of US talent pool. The Bureau of Labor Statistics ignores their own research about numbers of unemployed/underemployed scientists and believes the execs and HR "experts" - leading to a this perceived lack of STEM talent in the USA. Ironically, execs will gladly pay the legal and HR dept. big salaries, but can't seem to find the money to hire experienced scientists, who have spent many years in Ph.D./Post-doc training, to develop new products that drive the business.

"Medical scientists" you say? I just finished a PhD in cancer biology from MD Anderson...People aren't exactly throwing jobs at me. TONS of open postdoc positions (according to NIH standards, my recommended pay is $39k, less than a technician) but nothing in the realm of industry research...This nonsense makes me think the next thing they will say is that we need to train more PhDs...or maybe the likes of AstraZeneca and Merck are just priming the media and their investors for a scapegoat. That low level scientists are the reason they don't have a good pipeline.

High labor supply in a field with high capital costs? Maybe it's time to recognize that we chemists are members of the white-collar working class and unionize. That's a strategy that seems to be working well for electricians and lawyers (through their bar associations acting as a guild).

Can't recruit talent? Perhaps what they meant to say was that the last high-flying egotist with only theoretical experience of drug discovery, who they headhunted as head of R&D rather than appointing someone internally, found he couldn't hack it and b****red off for a higher-paid job elsewhere, but not before having caused such carnage that they can't find anyone else willing to do the job? I have to say I find that hard to believe. Such people seem depressingly numerous.

Fortunately, there is a management-speak app.
I tried it out. Here:
"Nearly three-quarters (72 percent) of executives said their organizations are looking to increase R&D capacity over the next 12 months" - 28% of executives are telling the truth. But that's still too high. App needs an update.

"fifty-one percent of industry executives report that hiring has become increasingly difficult and only 28 percent feel very confident they will have access to top talent." -- try looking on another continent, jackasses.

"Finally, senior executives must act as a powerful motivating force for their people."-- This crashed my phone.

"Companies with decades-long legacies have lost their edge due to repeated layoffs, wearing down the morale of scientific staff."
Really? What a horrible coincidence. Fire everybody and his mother for ten years and morale is low? If this isn't a quote from a Wharton MBA I'll eat my testicles with a grapefruit spoon.

This was originally posted when the first version of this blogpost was up but it somehow got redirected to a totally unrelated discussion thread:

@9: a slight majority of drugmakers complain that it has become increasingly difficult to find the right talent and most worry they will not have access to the people they need to hire

Translation: it has become increasingly difficult to find the right talent who is no older than 35 with no more than 5 years experience in (insert esoteric and extremely specific job function which typically requires 10 years or more of experience for mastery here) who will accept a "globally competitive" salary and not saddle us with healthcare, pension or other profit-eroding longterm costs. The 150,000 we laid off need not apply. They were all low performers. We only lay off poor performers. We are looking for highly motivated team players.

A very good friend is a nurse, and there have been similar, laughable stories about nursing shortages that fly in the face of experienced, highly qualified nurses who can't seem to find jobs at salaries that match their experience level. Coincidentally, just yesterday brought an opinion piece on what is arguably the most influential physician blog, KevinMD.com: "The Nursing Shortage: Why it isn't a Good Time to Become a Nurse." Sounds very familiar.

When high-level executives say they can't find the right talent, I think what they are really doing is spinning things so that the blame for any failure does not come back to them, but rather falls on forces outside their control. In this case, they are blaming the well-publicized "fact" that there aren't enough skilled people available.

It has nothing to do with whether the statement is true, it has to do with repeating something enough times that everyone starts to believe it, and they start to see the world through the glasses that are most favorable to your own interests.